Fraud threats facing the Commonwealth arise principally from two areas: individuals employed by the Commonwealth or contractors (internal fraud); and customers/clients of the Commonwealth, third-party providers, vendors, or members of the public, in Australia or overseas (external fraud).
The current report presents the information about the most harmful internal and external frauds committed against the Commonwealth in 2018–19, compared with those reported in 2016–17 and 2017–18. Data come from finalised fraud investigations that were reported by Commonwealth entities in response to the Australian Institute of Criminology’s annual fraud census.
The findings show that losses from both the most harmful internal and external frauds were lower in 2018–19 than in 2017–18. In 2018–19, 44 percent of respondents identified the most harmful internal fraud perpetrator as having been employed with the entity for longer than seven years. The majority of the most harmful internal frauds were committed by individuals with either no security clearance or an unknown clearance status. In 2018–19, a higher proportion of perpetrators received a sentence of imprisonment following conviction for the most harmful external frauds than internal frauds. In 2018–19, the most common fraud control weaknesses identified were perpetrators overriding existing internal controls and the lack of knowledge concerning fraud risks.
Contents
- Abstract
- Introduction
- Most harmful internal fraud
- Cost of internal fraud
- Nature of offending
- Discovery and investigation
- Characteristics of internal fraud perpetrators
- Fraud control weaknesses
- Most harmful external fraud
- Cost of external fraud
- Nature of offending
- Discovery and investigation
- Characteristics of external fraud perpetrators
- Fraud control weaknesses
- Discussion
- References